Cadbury-maker Mondelez raises annual forecasts boosted by strong demand
Reuters
Published Jul 27, 2023 21:14
Updated Jul 27, 2023 23:45
(Reuters) -Mondelez International on Thursday raised its full-year growth forecasts for the second time this year, helped by robust demand for the Oreo maker's snacks and chocolates despite several rounds of price increases.
Shares of the Cadbury chocolate maker rose 2.7% in after-hours trading as it also beat estimates for the second quarter.
Major packaged-food makers like Hershey, Campbell Soup, Cheerios maker General Mills and Nestle have leveraged strong demand to hike prices and shield their margins from higher raw material and transportation costs.
"Strong sales and better productivity drove a solid increase in profitability," Edward Jones analyst Brittany Quatrochi said.
Candy maker Hershey also lifted its annual profit forecast earlier in the day, a sign that consumers continued to spend on their favorite cookies, gum and candy.
"Overall, the consumer remains resilient, with elasticities holding up relatively well in chocolate and biscuit," CFO Luca Zaramella said in a call with analysts.
The company logged double-digit organic revenue growth across regions, including Europe, Latin America and North America, which helped improve its margins during the quarter.
Executives on the call said they were "very encouraged by our China business", particularly in the gum segment.
However, the Chicago-based firm witnessed a volume decline in Europe as it closed price negotiations with retailers "in line with expectations", CEO Dirk Van de Put said.
"Now that pricing is 100% secured, we expect volume and revenue growth, as well as margin improvement for Europe," Zaramella said.
The Toblerone maker now expects full-year organic net revenue and adjusted per-share profit growth of more than 12%, compared to a prior outlook of a 10% increase.
Separately, Mondelez (NASDAQ:MDLZ) has sold its remaining stake in Keurig Dr Pepper (NASDAQ:KDP) for $704 million in proceeds, it said in a filing.
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Written By: Reuters
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